Canadian firms hopeful on medium-term Vietnamese economic prospects

According to official statistics, Vietnam's Gross Domestic Product (GDP) during the first half of this year grew by 5.64%. Recently, the World Bank (WB) forecast that the nation's GDP growth is estimated to be at approximately 4.8% for the entire year, an impressive figure for international partners, particularly as the whole country is struggling to cope with a challenging wave of COVID-19 outbreaks.

Marc Djandji, founder and managing director of ASEAN Strategy Group Ltd – a firm which provides key services in the areas of market access, sourcing, import/export, and management consulting, said that the country is one of the best performing stock markets in the world. Indeed, the local economy also maintained a strong recovery until the first half of the year.

However, the recent wave of COVID-19 infections has forced a number of businesses in major cities and industrial centres to close, thereby limiting Vietnamese economic activities over the subsequent months.

The industrial, manufacturing, and construction sectors have all been affected, while household income, savings, and spending are also forecast to suffer a decline.

Despite this, Djandji expressed his appreciation for the spirit of solidarity shown by the Vietnamese people in the fight against the invisible enemy, emphasising that the economic recovery this year will depend on the results of the COVID-19 vaccination campaign.

On that basis, he predicts that in the medium term the growth prospects for the Vietnamese economy will remain solid, driven by the process of industrialisation and urbanisation.

Moving forward, the country will continue to benefit from integration into the global supply chain, FDI attraction, and rapid growth in the manufacturing sector, he said.

Echoing this viewpoint, Phil Witherington, chief financial officer of Manulife Financial Corp., expressed his optimism about the future growth of the Vietnamese economy. Although the resurgence of COVID-19 may have a short-term negative impact, the market's long-term potential remains strong and will stand firm, he stated.

The Vietnamese Government is therefore on the right track to work alongside firms like Manulife to protect workers and customers, whilst also taking actions to encourage greater economic development.

Witherington outlines that Manulife sees a great opportunity in meeting the health, protection, savings, and investment needs of customers nationwide, with the firm having a long history of operations in Asia. Indeed, it has already established a presence in several ASEAN markets such as Singapore, Malaysia, Indonesia, and the Philippines over the past 100 years.

He went on to highlight the Vietnamese market as being one of the region's biggest economic success stories and one of Manulife's biggest markets within ASEAN.
With an estimated population of 120 million by 2050, the country can be viewed as an attractive destination for Canadian businesses.

Alongside trade in goods and services, many co-operation opportunities have emerged in other areas such as investment, financial service, infrastructure development, supply chain diversification, technology, and human resource development.